I had no problem assuming the "lost" IRS emails were incompetence rather than criminal evidence tampering. After all, how hard is it to believe the government is incompetent?

But it may be in this case it really was fraud. Suddenly the emails have been found, and they were apparently always there -- despite all protestations to the contrary, no one in the IRS had even asked for them. From the WaPo:

The Treasury Inspector General for Tax Administration testified at a House Oversight and Government Reform Committee hearing on Thursday that it tracked down nearly 33,000 emails from ex-IRS official Lois Lerner.

The records date back to 2001, which is 10 years beyond what the IRS has said it could access for investigators.

The inspector general’s office said it is working to identify any messages that the IRS has not already sent to congressional investigators, who are examining the Lerner’s involvement in the IRS targeting scandal.

The watchdog agency found the backed-up emails by consulting with IRS information-technology specialists, according to TIGTA Deputy Inspector General for Investigations Tim Camus.

“They were right where you would expect them to be,” he said at the rare late-night hearing, which lasted until about 10 p.m.

IRS Commissioner John Koskinen testified before Congress last year that the backups were no help in recovering Lerner’s lost emails, in part because the IRS overwrites them every six months.

Camus said the IRS’s technology specialists told investigators that no one from the agency asked for the tapes, raising doubts about whether the agency did its due diligence in trying to locate Lerner’s emails, or possibly greater troubles.

In the Fast and Furious and IRS scandals, the Administration has purposefully dragged its feet on disclosures. The strategy is to let as much time pass so that when bad revelations eventually come out, the heat from the original scandal is gone. Defenders of the Administration will then argue the revelations are "old news", as if there is some statute of limitations on outrage. This strategy has driven Republicans crazy.

So what do Conservatives do when the torture report comes out after months and months of foot-dragging trying to prevent its release? You got it, they scream "old news". Scott Johnson:

I confess that I do not understand the rationale supporting the publication of the Democrats’ Senate Select Committee study of the CIA’s detention and interrogation program. On its face, it seems like ancient history (of a highly tendentious kind) in the service of a personal grudge. It is not clear to me what is new and it is not clear that what is new is reliable, given the absurd limitations of the committee’s investigation.

By the way, I want to make one observation on this line from attorneyJohn Hinderaker:

Similarly, the report confirms that the Agency’s enhanced interrogation techniques were used on only a small number of captured terrorists, 39 altogether. These enhanced techniques include the “belly slap” and the dreaded “attention grasp.”

Most important, it appears that waterboarding really was the most extreme sanction to which any of the terrorists were subjected (and only three of them, at that). Given all the hoopla about CIA “torture,” one might have expected to learn that far worse happened at the Agency’s dark sites. But, as far as the report discloses, the Agency stuck almost exclusively to its approved list of tactics, all of which the Department of Justice specifically found not to be torture.

Were some of the captured terrorists treated roughly? Absolutely. Their lives must have been miserable, and deservedly so. Some of the 39 were placed in stress positions for considerable lengths of time, doused with water, fed poor diets, left naked in cells. In one instance, a terrorist was threatened with a power drill. In another case, an interrogator told a terrorist that his children may be killed. There were two instances of mock execution.

A few observations:

The fact that they were "terrorists" seems to justify the mistreatment for him. But how do we know they were terrorists? Because the Administration said so. There was no due process, no right of appeal, no ability to face witnesses, no third party review, none of that. A branch of the Administration grabbed the guy, said you are a terrorist, and started torturing them. I am not saying that they did this without evidence, but I am sure Mr. Hinderaker know from his own experience that every prosecutor thinks every person he or she tries is guilty. That is why both sides get to participate in the process.

"Terrorist" is an awfully generic word to give us automatic license to torture people. My sense is that there are all kinds of shades of behavior lumped under that word. Conservatives like Mr. Hinderaker object, rightly, to a wide range of sexually aggressive actions from unwanted kissing to forced penetration being lumped under the word "rape". But my sense is we do the same thing with "terrorists".

In my mind the casualness with which he can accept these kinds of treatments for people he does not like is morally debilitating. It is a small step from accepting it for one to accepting it for many. It is like the old joke of a debutante asked if she would have sex for a million dollars and saying "yes", then getting asked if she would have sex for $20 and responding "what kind of girl do you think I am?" We've already established that, we are just haggling over price.

For those on the Right who say that all this stuff about due process does not apply because the "terrorists" were not citizens, then welcome to the Left! Individual rights are innate -- they are not granted by governments (and thus by citizenship). The Right generally says they believe this. It is the Left whose positions imply that rights are favors granted by the state to its citizens.

These costs certainly were potentially high for my company. If we had to provide health care for all of our employees, it would cost us an annual sum between 3 and 4 times our annual profit. As many of your know, my company runs public parks and campgrounds. Already, we have struggled to get government authorities to approve fee increases driven by local minimum wage increases. Most of these authorities have already told us that they would not allow fee increases in most cases to offset the costs of the PPACA employer mandate. So we have spent a lot of time converting between 90 and 95% of our employees to part-time, so the mandate would not apply to them. I have gotten a lot of grief for my heartlessness on this in the comments, but I have zero idea what else I could have done short of simply shutting down the business.

Yesterday I was in an information session about the employer mandate and saw that the other shoe had dropped for companies -- the reporting requirement. Despite the fact that the employer mandate was supposed to kick in almost 9 months ago, until recently the government had still not released the reporting requirements for companies vis a vis the mandate. Well, apparently the draft reporting requirements was released a few weeks ago. I may be missing something, but the key requirement for companies like mine is that every employee must receive a new form in January called an IRS 1095-C, which is parallel to the W-2 we all get to report income.

I know that many of you have probably been puzzled as to what some of those boxes mean on the W-2. Well, you are going to love the 1095C

Everyone is scratching their heads, wondering what this means. For someone like me who has seasonal and part time workers, this form is a nightmare, and I have no idea how we are going to do this. Just to give you a flavor, here are the code choices for line 14:

1A. Qualified Offer: Minimum Essential Coverage providing Minimum Value offered to full-time
employee with employee contribution for self-only coverage equal to or less than 9.5% mainland
single federal poverty line and Minimum Essential Coverage offered to spouse and
dependent(s).

1F. Minimum Essential Coverage not providing Minimum Value offered to employee, or employee and spouse or dependent(s), or employee, spouse and dependents.

1G. Offer of coverage to employee who was not a full-time employee for any month of the calendar year and who enrolled in self-insured coverage for one or more months of the calendar year.

1H. No offer of coverage (employee not offered any health coverage or employee offered coverage not providing Minimum Essential Coverage).

1I. Qualified Offer Transition Relief 2015: Employee (and spouse or dependents) received no offer of coverage, or received an offer of coverage that is not a Qualified Offer, or received a Qualified Offer for less than all 12 Months.

Completing lines 14-16 will require an integration of our payroll provider with our health insurance information that I have no idea how we are going to pull off.

In Halbig, the DC Circuit argued that the plain language of the PPACA should rule, and that subsidies should only apply to customers in state-run exchanges. I am going to leave the legal stuff out of this post, and say that I think from a political point of view, Obamacare proponents made a mistake not sticking with the actual language in the bill. The IRS was initially ready to deny subsidies to the Federal exchanges until Administration officials had them reverse themselves. When the Obama Administration via the IRS changed the incipient IRS rule to allow subsidies to customers in Federal exchanges, I believe it panicked. It saw states opting out and worried about the subsidies not applying to a large number of Americans on day 1, and that lowered participation rates would be used to mark the program as a failure.

But I think this was playing the short game. In the long game, the Obama Administration would have gone along with just allowing subsidies to state-run exchanges. Arizona, you don't want to build an exchange? Fine, tell your people why they are not getting the fat subsidies others in California and New York are getting. Living in Arizona, I have watched this redder than red state initially put its foot down and refuse to participate in the Medicaid expansion, and then slowly see that resolve weaken under political pressure. "Governor Brewer, why exactly did you turn down Federal Medicaid payments for AZ citizens? Why are Arizonans paying taxes for Medicaid patients in New Jersey but not getting the benefit here?"

Don't get me wrong, I would like to see Obamacare go away, but I think Obama would be standing in much better shape right now had he limited subsidies to state exchanges because

The disastrous Federal exchange roll-out would not have been nearly so disastrous without the pressure of subsidies and the data integration subsidy checks require. Also, less people would have likely enrolled, reducing loads on the system

Instead of the main story being about general dissatisfaction with Obamacare, there would at least be a competing story of rising political pressure in certain states that initially opted out to join the program and build an exchange. It would certainly give Democrats in red and purple states a positive message to run on in 2014.

One of the great dangers of historical analysis is applying our modern standards and ex post facto knowledge to analysis of historical decisions. For example, I see modern students all the time assume that the Protestant Reformation was about secularization, because that is how we think about religious reform and the tide of trends that were to follow a century or two later. But tell John Calvin's Geneva it was about secularization and they would have looked at you like you were nuts (If they didn't burn you). Ditto we bring our horror for nuclear arms developed in the Cold War and apply it to decision-makers in WWII dropping the bomb on Hiroshima. I don't think there is anything harder in historical analysis than shedding our knowledge and attitudes and putting ourselves in the relevant time.

Believe it or not, it does not take 300 or even 50 years for these problems to manifest themselves. They can occur in just four. Take the recent Halbig case, one of a series of split decisions on the PPACA and whether IRS rules to allow government subsidies of health care policies in Federal exchanges are consistent with that law.

The case, Halbig v. Burwell, involved the availability of subsidies on federally operated insurance marketplaces. The language of the Affordable Care Act plainly says that subsidies are only available on exchanges established by states. The plaintiff argued this meant that, well, subsidies could only be available on exchanges established by states. Since he lives in a state with a federally operated exchange, his exchange was illegally handing out subsidies.

The government argued that this was ridiculous; when you consider the law in its totality, it said, the federal government obviously never meant to exclude federally operated exchanges from the subsidy pool, because that would gut the whole law. The appeals court disagreed with the government, 2-1. Somewhere in the neighborhood of 5 million people may lose their subsidies as a result.

This result isn’t entirely shocking. As Jonathan Adler, one of the architects of the legal strategy behind Halbig, noted today on a conference call, the government was unable to come up with any contemporaneous congressional statements that supported its view of congressional intent, and the statutory language is pretty clear. Members of Congress have subsequently stated that this wasn’t their intent, but my understanding is that courts are specifically barred from considering post-facto statements about intent.

We look at what we know NOW, which is that Federal health care exchanges operate in 37 states, and that the Federal exchange serves more customers than all the other state exchanges combined. So, with this knowledge, we declare that Congress could not possibly meant to have denied subsidies to more than half the system.

But this is an ex-post-facto, fallacious argument. The key is "what did Congress expect in 2010 when the law was passed", and it was pretty clear that Congress expected all the states to form exchanges. In fact, the provision of subsidies only in state exchanges was the carrot Congress built in to encourage states to form exchanges. (Since Congress could not actually mandate states form exchanges, it has to use such financial carrots and stick. Congress does this all the time, all the way back to seat belt and 55MPH speed limit mandates that were forced on states at the threat of losing state highway funds. The Medicaid program has worked this way with states for years -- and the Obamacare Medicare changes follow exactly this template of Feds asking states to do something and providing incentives for them to do so in the form of Federal subsidies). Don't think of the issue as "not providing subsidies in federal exchanges." That is not how Congress would have stated it at the time. Think of it as "subsidies are not provided if the state does not build an exchange". This was not a bug, it was a feature. Drafters intended this as an incentive for creating exchanges. That they never imagined so many would not create exchanges does not change this fact.

It was not really until 2012 that anyone even took seriously the idea that states might not set up exchanges. Even as late as December 2012, the list was only 17 states, not 37. And note from the linked article the dissenting states' logic -- they were refusing to form an exchange because it was thought that the Feds could not set one up in time. Why? Because the Congress and the Feds had not planned on the Federal exchanges serving very many people. It had never been the expectation or intent.

If, in 2010, on the day after Obamacare had passed, one had run around and said "subsidies don't apply in states that do not form exchanges" the likely reaction would not have been "WHAT?!" but "Duh." No one at the time would have thought that would "gut the whole law."

Postscript: By the way, note how dangerous both the arguments are that opponents of Halbig are using

The implementation of these IRS regulations are so big and so far along that it would be disruptive to make them illegal. This means that the Administration is claiming to have the power to do anything it wants as long as it does it faster than the courts can work and makes sure the program in question affects lots of people

The courts should give almost unlimited deference to Administration interpretations of law. This means, in effect, that the Administration rather than the Courts are the preferred and default interpreter of law. Does this make a lick of sense? Why have a judiciary at all?

If you were getting investigated by the IRS, and you gave the IRS the answers that they have been giving the public over Lois Lerner's and others' lost emails, do you think that the IRS would accept your answer?

By the way, a system crash that makes a hard drive totally unreadable is just vanishingly rare nowadays. It is possible to corrupt certain system files in the root that will make it impossible to log on to the computer or access the hard drive files normally, but they are still there. Something with the hard drive's motor or read heads could fail, but the data is still there. Even if you highlighted every file in your hard drive and hit the delete key, they are still there. When you hit delete they are taken out of the file directory and may get overwritten if you add new data to the computer, but without special software, it is actually hard to totally delete files (this is why you have to be careful when you donate or dispose of computers). It actually can take the better part of an hour to really remove all files from a hard drive so that they are unrecoverable.

Given all this, I think the odds are that 6 or 7 computers of a group of senior leaders in the same office all crashed at roughly the same time in a way that wiped out all the data from their hard drives such that all data would be unrecoverable is simply beyond credulity.

Ken White at Popehat offers some useful insight to non-lawyers among us about compelled testimony (in the context of the Louis Lerner/IRS saga)

Some people have argued that Lois Lerner should be compelled to testify, either by court order or by grant of immunity. Lerner and her lawyers would love that, as it would make prosecuting her for any suspected wrongdoing incredibly difficult.

Compelled testimony is radioactive. If a witness is compelled to testify, in any subsequent proceeding against them the government has a heavy burden to prove that no part of the prosecution is derived from the compelled testimony, which is treated as immunized. This is called theKastigar doctrine:

"Once a defendant demonstrates that he has testified, under a state grant of immunity, to matters related to the federal prosecution, the federal authorities have the burden of showing that their evidence is not tainted by establishing that they had an independent, legitimate source for the disputed evidence." 378 U.S. at 378 U. S. 79 n. 18. This burden of proof, which we reaffirm as appropriate, is not limited to a negation of taint; rather, it imposes on the prosecution the affirmative duty to prove that the evidence it proposes to use is derived from a legitimate source wholly independent of the compelled testimony.

If I read this right, if the House were to compel her to testify, they might as well grant her immunity and be done with it.

Further on in the post, Ken points out an issue that I have been wondering about myself -- Those who want Lerner to testify are concerned with government arbitrary abuse of power for political purposes. Given that, how can these same folks have any doubt as to why Lerner might plead the Fifth in front of a hostile and partisan House committee

I've been seeing a lot of comments to the effect of "why should Lois Lerner take the Fifth if she has nothing to hide?" Ironically these comments often come from people who profess to oppose expansive government power, and from people who accept the proposition that Lerner was part of wrongdoing in the first place — in other words, that there was a government conspiracy to target people with the machinery of the IRS for holding unpopular political views. Such people do not seem to grasp how their predicate assumptions answer their own question.

Pardon me: if you accept the proposition that the government targets organizations for IRS scrutiny because of their political views, and you still say things like "why take the Fifth if you have nothing to hide", then you're either an idiot or a dishonest partisan hack.

If you want to get bent out of shape about something, you are welcome to wonder why Lerner is being investigated, apparently, by the hyper-partisan civil rights division of Justice rather than the public integrity section. That, combined with President Obama's pre-judging of the DOJ's conclusions, is more of a red flag than Lerner's taking the Fifth.

Remember, Martha Stewart did not go to jail for securities fraud of any sort. She went to jail for statements she made during the government investigation.

Consider what administration officials announcing the new exemption for medium-sized employers had to say about firms that might fire workers to get under the threshold and avoid hugely expensive new requirements of the law. Obama officials made clear in a press briefing that firms would not be allowed to lay off workers to get into the preferred class of those businesses with 50 to 99 employees. How will the feds know what employers were thinking when hiring and firing? Simple. Firms will be required to certify to the IRS – under penalty of perjury – that ObamaCare was not a motivating factor in their staffing decisions. To avoid ObamaCare costs you must swear that you are not trying to avoid ObamaCare costs. You can duck the law, but only if you promise not to say so.

As I have written about before, our company closed some California operations in December and laid off all the employees. As with most business closures, we had multiple reasons for the closure. The biggest problems were the local regulatory issues in Ventura County that made it impossible to make even simple improvements to the facilities. But certainly looking ahead at costs soon to be imposed due to looming California minimum wage increases and the employer mandate contributed to the decision.

So, did I fire the workers over Obamacare? If Obamacare were, say, 10% of the cause, would I be lying if I said I did not fire workers over Obamacare? Or does it need to be 51% of the cause? Or 1%? Or 90%. Business decisions are seldom based on single variables. I am just exhausted with having my life run by people whose only experience with the real world was sitting in policy seminars at college.

Update: The actual effect of this will not likely be to change business behavior, but change how they talk about it. Worried that there will be too many stories next election about job losses due to Obamacare, the Administration is obviously cooking up ways not to limit the job losses, but to limit discussion of them.

Faulting the IRS for attempting to “unilaterally expand its authority,” the D.C. Circuit today affirmed a district court decision tossing out the agency’s tax-preparer licensing program. Under the program, all paid tax-return preparers, hitherto unregulated, were required to pass a certification exam, pay annual fees to the agency, and complete 15 hours of continuing education each year.

The program, of course, had been backed by the major national tax-return preparers, chiefly as a way of driving up compliance costs for smaller rivals and pushing home-based “kitchen table” preparers out of business. Dan Alban of the Institute for Justice, lead counsel to the tax preparers challenging the program,called the decision “a major victory for tax preparers—and taxpayers—nationwide.”

The licensing program was not only a classic example of corporate cronyism, but also of agency overreach. IRS relied on an 1884 statute empowering it to “regulate the practice of representatives or persons before [it].” Prior to 2011, IRS had never claimed that the statute gave it authority to regulate preparers. Indeed, in 2005, an IRS official testified that preparers fell outside of the law’s reach.

Perhaps a first indication that the Obama Administration strategy to pack the DC Circuit with Obama appointees may not necessarily protect his executive overreach.

Note first that the diversion between high and low-wage** industries did not occur during the recession, and in fact through the recession the two groups tracked each other pretty closely until early 2010. Then, in early 2010, something made the two lines start to diverge and in 2012-2013 they really went in opposite directions.

Well, my suggestion for the "something" is Obamacare. In March 2010, the PPACA was passed. Looking at the jobs data, one can date the stall in the economic recovery almost precisely from the date the PPACA was passed (e.g. here).

The more important date, though, is January 1, 2013. This is a date that every business owner was paying attention to at the time but which seems entirely lost on the media. All the media was focused on the start-date of the employer mandate on January 1, 2014. Why was the earlier date important? Let's go back in time.

At that time, the employer mandate had yet to be delayed. The PPACA and IRS rules in place at the time called for a look-back period in 2013 where actual hours worked for each employee would be tracked to determine whether the employee would classified as full or part-time on the Jan 1, 2014 start date. So, if a company wanted to classify an employee as part-time at the start of the employer mandate (and thus avoid penalties for that employee), that employee needed to be converted to part-time as early as possible, preferably before 2013 even started and at worst by mid-year 2013 [sorry, I typo-ed these dates originally].

Unlike the government, which apparently waits until after the start-up date to begin building large pieces of major computer systems, businesses often tackle problems head on and well in advance. Faced with the need to have employees be working 29 hours or less a week in the 2013 look-back period, many likely started making changes back in 2012. Our company, for example, shifted everyone we could to part time in the fourth quarter of 2012. I know from talking to the owners of several restaurant chains that they were making their changes even earlier in 2012. One employee of mine went to Hawaii in October of 2012 and said that all the talk among the resort employees was how they were getting cut to part-time over Obamacare.

Yes, the employer mandate was eventually delayed, but by the time the delay was announced, every reasonably forward-looking company that was going to make changes had already done so. Having made the changes, there is no way they were going to switch back, and then back yet again when the Administration finally stumbles onto an actual implementation date.

If this chart gets any traction over the next few days, expect to see a lot of ignorance as PPACA defenders claim that the fall in low-wage work hours can't possibly have anything to do with the PPACA because the employer mandate has not even started. Now you know why this argument is wrong. The PPACA, and associated IRS implementation rules, drove companies to convert full-time to part-time jobs as early as 2012.

Usual warning: Correlation is not causation. However, I will submit that I was predicting exactly this sort of result years before it occurred. This is not a spurious correlation that is ex post facto blamed on whatever particular bete noir I might have. I and many other predicted that Obamacare would drive down work hours per week in lower-wage industries, and now having seen exactly that correlated with key Obamacare dates, it is not going to far to hypothesize a connection.

** Why could low-wage industries be impacted more than high-wage? Two reasons. One, low-wage industries are far less likely to offer a full Obamacare-compatible health plan to employees than high wage industries. Second, the fixed penalties ($2000 and $3000 per employee) for lack of insurance plans are obviously a far higher percentage of the total pay in low-wage vs. high-wage industries. A penalty that is 15% of annual pay is much more likely to cause employers to shift or reduce work than a 3% penalty.

Glen Reynolds brings us this bit from a letter to the WSJ about the IRS and 501c4's:

For example, if an IRS official subjects citizens to incredibly burdensome demands for irrelevant information just to harass them for their political or religious beliefs, no 501(c)(4) group could later criticize that official’s nomination to be IRS commissioner, without engaging in restricted activity. That’s because the IRS’s proposed regulation defines even unelected government officials, like agency heads and judges, as “candidates” if they have been nominated for a position requiring Senate confirmation. The IRS’s proposed rules are an attack on the First Amendment that will make it easier for the government to get away with harassing political dissenters and whistleblowers in the future.

The part about classifying Senate-confirmed officials as "candidates" seems to be part of the same initiative as the changes to the filibuster to make it easier for the President to confirm controversial judges and administrators. I wonder if this is a general effort or battlespace preparation for a specific confirmation battle.

I try to read a couple of team-politics blogs from both the red and blue side, to stay in touch with what they are saying and stay out of an echo chamber. Also, of course, libertarians make common cause with both parties on various issues. But the mindless team politics angle can really be a bore.

One of the reasons I like to read Kevin Drum on the left is that his initial reactions to things often seems pretty honest. When his side really screws up, like the IRS scandal or failing Obamacare exchanges, his initial reaction will generally be to honestly critique a bad situation. And then about 3-5 days into the scandal or crisis or discussion of an issue, he will catch on to and adopt the party line on an issue and then become incredibly tedious (for example, on the IRS scandal, he was honestly critical for a while and then adopted the silly "leftish groups were equally targeted meme" and has stuck to it by rote since). But at least there are those few days of honesty, which separates him from a lot of the left and right team politics blogs.

So the timing is just about right for the Left to pick a meme to explain away the millions of people who are getting their policies cancelled despite being told that they could keep their health insurance. Mainstream outlets like CBS and NBC are pushing the story, not just right-wing and libertarian blogs, so the Ezra Klein's of the world must be working diligently to pick a meme and then enforce it. It will be interesting to see what they choose.

FACT: Nothing in #Obamacare forces people out of their health plans. No change is required unless insurance companies change existing plans.

This is hilarious. Technically true, since my cancellation came from Blue Cross and not the government, but obviously the Blue Cross decision to cancel me was forced by the terms of the law. This is obviously absurd, but is it too absurd for the media? I don't know, and of course it gets extra lefty bonus points for blaming government-caused problems on private businesses. Next up, Exxon to blame for gasoline taxes!

The Obama administration on Tuesday defended its effort to regulate the tax return preparation business for the first time in U.S. history, basing its case largely on a 19th century law dealing with horses lost or killed in the Civil War....

[the Obama Administration attorney] explained that the administration sees the "Horse Act of 1884" as providing ample authority for the U.S. Internal Revenue Service to regulate the tens of thousands of preparers who fill out millions of Americans' federal tax returns.

Here is the logic, such that it is

A post-war industry emerged of agents who would press war loss claims for a fee, usually a percentage of the claim collected. Soon, claim values were being fraudulently inflated.

In response, the government started regulating these intermediaries, barring unscrupulous ones and certifying honest ones as "enrolled agents," a title that is still used today by people who represent clients in matters before the IRS.

The IRS is arguing that tax return preparers represent their customers in much the same way that enrolled agents do, so the agency should be able to expand regulation to include preparers.

Note that tax preparers are not actually IRS enrolled agents, they just argue they are kind of sort of like them (in that they both deal with tax returns, I suppose). But enrolled agents explicitly act as an intermediary between citizens and the government in disputes and claims. This is not the role of tax preparers. They merely charge a fee to fill out time-consuming and confusion paperwork. My tax accountant has never once had any conversations with the IRS on my behalf, nor should he. I would engage an attorney for that.

I checked out the government web site today that supposedly offers advice to small businesses on Obamacare compliance. Of course, I found nothing on my main question, in part because the IRS cannot figure out what it wants to do (my question is on requirements and penalties vis a vis seasonal workers).

I was presented with a number of other government blog posts and articles, including "8 Ways Your Business Can Get Ready for the 2013 Tourist Season." Curious what the government would counsel on this topic, I clicked through. Obviously, there is a paragraph break and carriage return sequester. I cannot get the energy to read this kind of unformatted text. The advice is actually OK, and ironically one of the eight is that one should consider getting into the business I am in.

Well, it certainly comes as happy news to this correspondent that the Administration announced this week it will delay health insurance mandates on businesses. Our company has spent a ton of time since last November trying to minimize the expected cost of the mandates -- the initial cost estimates of which for our business came in at three times our annual net income. Our preparation has been hampered by the fact that the IRS still has not finalized rules for how these mandates will be applied to a seasonal work force. Like many retail service businesses, we have studied a number of models for converting most of our work force to part time, thus making the mandates irrelevant for us.

I know this last statement has earned me a fair share of crap in the comments section as a heartless capitalist swine, but the vitriol is just absurd. Many of the folks criticizing me can't or don't want to imagine themselves running a business, so let's say you have an annual salary of $40,000. Now, on top of all your other expenses, the government just mandated that you have to pay an extra $120,000 a year for something. That is the situation my business is in. Are you just going to sit there and allow your savings to become a smoking hole in the ground, or are you going to do something to avoid it? Unlike the government, I cannot run a permanent deficit and I cannot create new revenues by fiat. Congress allowed business owners a legal way to avoid the health insurance mandate, and I am going to grab that option rather than be bankrupted. So are every other service business I know of, which is why I have predicted that full-time jobs are on the verge of disappearing in the retail service sector.

Anyway, it appears that the IRS and the Administration could not get their act together fast enough to make this happen. Not a surprise, I suppose. You and I have both been in committee meetings, and have seen groups devolve into arguments aver useless minutia. This is not a monopoly of the government, it happens in the private sector as well. But in the private sector, in good companies, a leader steps in and says "I have heard enough, it is going to be done X way, now go do it." In government, the incentives work against leaders cutting through the Gordian knot in this way, so the muddle can carry on forever.

There are at least two more shoes that are going to drop, one bad, one good:

On the bad side, while companies like mine complain about the cost of the PPACA, they are going to freak when they see the paperwork. My sense is that we are going to be required to know in great detail what kind of health insurance policy every one of our employees have, even if it was not obtained through our company, and will have to report that regularly to the government. In addition, there are gong to be new reporting requirements to new agencies for wages and hours. It is going to be a big mess, and my uneducated guess is that someone in the last week or so looked at that mess and decided to hold off announcing it.

But readers can expect a Coyote freak out whenever it is announced, because it is going to be bad. Wal-mart will be fine, it has the money to build systems to do that stuff, but companies like mine with 500 employees but only 2 staff people are going to get slammed. There is a reason government agencies, even government schools, have more staff than line personnel -- they live and breath and think in terms of complex reporting and paperwork. They love it because for many it is their job security. Swimming every day in that water, it is no surprise they impose it without thought on the private sector. This makes it hard for companies like ours that try to have 99% of our employees actually serving customers rather than pushing paper.

The individual mandate is toast for next year. No way it happens. If the Administration cannot get the corporate piece done on time, there is no way in hell it is going to get the exchanges up and running. And even if they do, some prominent states with political influence with this President, like Illinois and California, likely will not get their exchanges done in time and will beg for a delay.

The Obama administration on Thursday acknowledged that it is collecting a massive amount of telephone records from at least one carrier, reopening the debate over privacy even as it defended the practice as necessary to protect Americans against attack.

The admission comes after the Guardian newspaper published a secret court order related to the records of millions of Verizon Communications customers on its website on Wednesday.

A senior administration official said the court order pertains only to data such as a telephone number or the length of a call, and not the subscribers' identities or the content of the telephone calls.

Such information is "a critical tool in protecting the nation from terrorist threats to the United States," the official said, speaking on the condition of not being named.

"It allows counter terrorism personnel to discover whether known or suspected terrorists have been in contact with other persons who may be engaged in terrorist activities, particularly people located inside the United States," the official added.

The revelation raises fresh concerns about President Barack Obama's handling of privacy and free speech issues. His administration is already under fire for searching Associated Press journalists' calling records and the emails of a Fox television reporter as part of its inquiries into leaked government information.

A few thoughts:

I have no doubt that this makes the job of tracking terrorists easier. So would the ability to break down any door anywhere and do random house searches without a warrant. The issue is not effectiveness, but the cost in terms of lost liberty and the potential for abuse. The IRS scandal should remind us how easy it is to use government power to harass political enemies and out-groups

The FISA court is a bad joke, as it seems willing to issue "all information on all people" warrants. I think there is little doubt that similar data gathering is going on at all the other carriers.

Luckily, Susan Rice is now the National Security Adviser. I am sure with her proven history of not just being a political puppet but really digging in to challenge White House talking points that she will quickly get to the bottom of this.

I am not sure the WSJ has the law right (I don't really trust the media any more to get basic facts correct), but assuming for a moment they know what they are talking about, this caught my attention vis a vis the IRS scandal:

Officials explained that the unit had made the change [to their targeting criteria] because it was receiving many applications for groups that focused on lobbying, which is a permitted activity, and that weren't involved in political activity, which is restricted.

So its OK to kiss a Senator's ass but not OK to advocate for his defeat in the next election? They may screw everything else up, but Congress is really good at making sure it takes care of itself.

I have had hard time parsing exactly what the intelligentsia means by "incivility." On the one hand, they often call for more civil discourse and lament the lack of incivility in government nowadays. But on the other hand, people like Obama very frequently argue by ad hominem attack, preferring to question the motives of the NRA or climate skeptics rather than engage their criticisms of gun control or CO2 limitations.

This has confused me, because I have always defined civility in discourse as the willingness to accept your opponent as a person of good will who merely disagrees or is misguided. But if this is civility, why the frequent "othering" of political opponents by the same folks calling for civility?

Well, it turns out I have been using the wrong definition of civility. As Donna Brazille makes clear, "incivility" means criticizing the President or attempting to hold him accountable for missteps of those who report to him. She actually beings by defining civility in a way with which I mostly agree:

A government of, by, and for the people requires that people talk to people, that we can agree to disagree but do so in civility. If we let the politicians and those who report dictate our discourse, then our course will be dictated.

And that, according to acting Commissioner Steven Miller, who just resigned, the problem started because the Supreme Court's Citizens' United decision created a surge of requests by political groups for tax-exempt status.

LOL - don't let politicians dictate our course - but everyone needs to shut up and take the word for two IRS officials that there is no scandal here (noting that we know from the IRS's own data that the last statement she urges us to accept in the name of civility is definitely false). Further, she says

Why am I alarmed? Because two "scandals" -- the IRS tax-exempt inquiries and the Department of Justice's tapping of reporters' phones -- have become lynch parties. And the congressional investigation of Benghazi may become a scandal in itself.

So let's of course all be civil, and civility means calling folks criticizing a black President "lynch mobs."

By the way, a bit off-topic, but this paragraph is a textbook example of tricks editorial writers use

The IRS scandal has sparked bipartisan outrage that should require a bipartisan solution. The director who oversaw this was a Bush appointee who was confirmed by a Democratic Congress. Even Watergate reporter Carl Bernstein says he doubts very much that Obama was involved

Each sentence here as a master-stroke of the spinmeister's pen trying to defend her guy in the White House.

Note the effort in the first sentence to shift this to a bipartisan issue. Both sides are upset. It is a good government issue. The implication we are supposed to draw is that this no longer can be a critique of this particular administration. It has transcended. This is how red-blue team political invective works. If the outrage is coming from just one party, it should not stick to the President because because it is petty partisanship. If it comes from both sides, it should not stick because it is a larger issue for all of us that transcends this particular Administration. In fact, through the article, she actually makes both arguments simultaneously. Brilliant!

It's Bush's fault. This is just so well-worn that Obama officials simply cannot help themselves. How can a man the Left thought to be so stupid and incompetent still be directing affairs four and half years after he left the building?

This one is really funny. Is, as implied by the structure of this sentence and the world "even", Carl Bernstein the least likely imaginable person to excuse Obama of such a charge? I think I am going to start writing this way. Even Warren Meyer thinks climate change has been exaggerated. Even Kim Kardashian thinks its important to get a lot of PR. Even Tia Carrere says its OK to make a bad movie once in a while. Hey, this is fun.

By the way, as I wrote before, it is unlikely Obama gave a specific order to harass the tea party. However, he has created a strong culture of "othering" his political enemies and impugning their motives as evil, sending a strong signal to his supporters such that actual orders were unnecessary. No one ordered from the top that Princeton students harass Yale at every opportunity (or even better, Penn). The culture takes care of it.

The Internal Revenue Service official in charge of the tax-exempt organizations at the time when the unit targeted tea party groups now runs the IRS office responsible for the health care legislation.

Sarah Hall Ingram served as commissioner of the office responsible for tax-exempt organizations between 2009 and 2012. But Ingram has since left that part of the IRS and is now the director of the IRS’ Affordable Care Act office, the IRS confirmed to ABC News today.

There won't be any direct order found telling the IRS to go hassle Conservative groups. That's not the way it works. Obama's style is to "other" groups he does not like, to impugn their motives, and to cast them as pariahs beyond the bounds of civil society. Such and such group, he will say, opposes me not because they have reasonable differences of opinion but because they have nefarious motives. Once a group is labelled and accepted (at least by your political followers) as such, you don't have to order people to harass them. They just do it, because they see it as the right thing to do to harass evil people. When Joe Nocera writes this in support of Obama in no less a platform as the NY Times, orders are superfluous

You know what they say: Never negotiate with terrorists. It only encourages them.

These last few months, much of the country has watched in horror as the Tea Party Republicans have waged jihad on the American people. Their intransigent demands for deep spending cuts, coupled with their almost gleeful willingness to destroy one of America’s most invaluable assets, its full faith and credit, were incredibly irresponsible. But they didn’t care. Their goal, they believed, was worth blowing up the country for, if that’s what it took...

He concludes by saying

For now, the Tea Party Republicans can put aside their suicide vests. But rest assured: They’ll have them on again soon enough. After all, they’ve gotten so much encouragement.

There are probably some deeply confused people in the IRS right now -- after all they were denying tax exempt status to terrorists, to enemies of America. They should be treated like heroes, and now they are getting all this criticism. So unfair.

But Obama, in his most candid moments, acknowledged that race was still a problem. In May 2010, he told guests at a private White House dinner that race was probably a key component in the rising opposition to his presidency from conservatives, especially right-wing activists in the anti-incumbent "Tea Party" movement that was then surging across the country.

This is totally the Obama way of fighting a political battle. He is saying, "forget their stated reasons for opposing me, such as opposition to the health care law, to Wall Street bailouts, and to rising government debt. They really oppose me because they are racists and I am black." Obama's opposition are absolutely never, ever people of good will who simply disagree.

PS#2: It's pretty hilarious the NY Times published Nocera's "Tea Partiers are Terrorists" editorial just 6 months after they editorialized against incivility in the context of the Giffords shooting, which by the way had as much to do with civility in public discourse as the Benghazi attacks had to do with a YouTube video. In fact, it sure seems like this administration has a history of falsely blaming tragedies on their political opposition's speech.

Every year I am required by law to fill out what is called the "Accommodation Report" by the Census Bureau. As a lodging company (we run campgrounds) I must reveal my revenues and some of my expenses. They ask for numbers aggregated differently from how we collect them for GAAP, so it is not a simple exercise. But I do it under protest, even though several of my competitors do not seem to be similarly punished with this requirement.

Well, I don't actually fully comply. We run over 150 small locations, and technically I am supposed to fill out an 8-page accommodation survey for every one of them. This would take a week of my time. So I pretend I have only one campground and report my summary revenue numbers for all our campgrounds as if they were for one location. Also, a year ago the Census folks began demanding the data quarterly, and I told them to pound sand, that I was on the verge of not doing the annual report and so I definitely was not going to do all that work quarterly.

Well, this year it got worse. For some reason, the survey this year had 3 extra pages asking me to break down my expenses in detail, in many categories that do not match those that I use in my bookkeeping. Here is an example page:

First, not only do I not have time to figure this out (who tracks software purchases as its own item in the accounting system?), but it is not the government's business, particularly given that I am a private company. Even the IRS is not this intrusive.

Further, at best the data I report will be used for nothing. More likely, it will be used to justify new taxes on me, new regulations on me, or new subsidies for my competitors. I have no desire to aid any of these activities.

Postscript: And you know what I have zero patience with? -- otherwise free market academic economists who support this kind of data gathering because it is critical. Yes, I am sure they much prefer to get free statistics for their work gathered via government coercion rather than have to pay for it, as one would have to do if we relied on private companies to gather this data rather than the government. There is absolutely no difference between an economist supporting government statistics gathering and any other company or individual asking that the government subsidize their inputs. But, but, we are critical to the country! Yeah, the sugar industry says the same thing.

CNS News reported, and no one in the Obama Administration seems to be denying, that the IRS is assuming the cheapest conforming health insurance policy for a family of four under Obamacare will cost $20,000 per year

The IRS's assumption that the cheapest plan for a family will cost $20,000 per year is found in examples the IRS gives to help people understand how to calculate the penalty they will need to pay the government if they do not buy a mandated health plan.

The examples point to families of four and families of five, both of which the IRS expects in its assumptions to pay a minimum of $20,000 per year for a bronze plan.

“The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000,” the regulation says.

Bronze will be the lowest tier health-insurance plan available under Obamacare--after Silver, Gold, and Platinum.

Kevin Drum shot back, saying that Conservatives were essentially out of touch for thinking that health insurance currently, or could ever conceivably, cost much less

So is this unusual? Not really. The average cost of healthcare coverage for a family is currently about $16,000,and by 2015 (the base year for the IRS examples) that will probably be around $18,000 or so. And that's for employer-sponsored plans. Individual plans are generally steeper, so $20,000 isn't a bad guess. It might be a little high, but not by much. And the family in question will, of course, be eligible for generous subsidies that bring this cost down substantially, thanks to the Affordable Care Act. They won't actually pay $20,000 per year.

(We'll ignore that last part as typical Progressive double think -- as long as the government is paying, the costs don't count. It's like being free!)

I can't believe that Drum has actually shopped for health insurance of late. The link he relies on for his data is for employer plans only, and Drum makes the unproven assumption that these are somehow less costly than individual plans people have to actually shop for. This is false. Employer plan averages include a lot of gold-plated policies in the mix driven by noncompetitive union contracts and executives wanting gold-plated plans for themselves at the expense of shareholders. I would argue that Drum is comparing "platinum" plans today to "bronze" plans under Obamacare, and it should be disturbing that even with this bit of judo, bronze Obamacare plans come out 20%+ more expensive than gold-plated current corporate plans.

But there is an even easier way to solve this, one Drum (who is nominally a "journalist") could solve with a few phone calls or clicks on Internet sites: we can get some quotes. Being a blogger with a real job, I do not have time to do this, but fortunately I don't have to because I just did this a few months ago for my family. Here are a few quotes for a family of four with two 50+ old adults in pretty good health and two teenage kids from Blue Cross - Blue Shield of Arizona:

Note first that these high deductible and HSA policies are ILLEGAL under Obamacare, in large part because they are actual insurance and Progressives don't mean "insurance" when they say "health insurance", they mean fully pre-paid all-encompassing medical care. I consider the purpose of insurance to be to protect from catastrophes that you can't afford (e.g. your house burns down). In the case of medical care, I thought about from my financial position, and determined what the largest financial setback I could bear in a year if someone really had a medical problem. So I set my deductible at that number, and made sure I bought a policy that paid everything else above that reliably, without any low lifetime or maximum payment numbers.

The Blue Optimum above is a fairly standard co-pay plan that covers most doctor visits and drugs with only a copay. The Blue Portfolio are HSA plans that are pure insurance. I pay everything (except certain preventative care costs) up to the deductible, and they pay everything else above that. In this case, note that the deductible is per person but there is a total family/policy deductible of twice that. In other words, with the second policy, even if everyone in my family gets cancer in the same year, we aren't out of pocket more than $6,000. So, for this middle policy, in typical years we spend $8,445.60 plus, say, another $1000 on miscellaneous stuff for a total health cost of $9,445.60. Or half the Obamacare "bronze" or cheapest possible plan. In the worst possible year, if two family members get very sick in the same year (not a hugely likely event) we are out $14,445.60 per year. This is the worst case. Still 28% lower than the cheapest Obamacare option.

In this plan, I am allowed under the HSA provision to bank about $5,000 a year in a pre-tax account. I can use this money to pay medical bills up to the deductible, or save it. If money is left over some day, it becomes a retirement account and I can use the money for retirement. So I have the financial incentive to shop around for best prices, because the residual in the HSA is mine to spend on .... whatever. I have told the stories a number of times here about my medical shopping experience. X-rays that were charged to insurance companies for $250 suddenly cost $45 when I said I was paying cash. My wife got a 70% cost reduction the other day on orthodic shoes when she offered to pay cash rather than put her insurance in play. So, not only will Obamacare raise the prices of my insurance substantially, it will also raise medical costs in general by stripping away the last incentives for anyone to price-shop for health care.

When I read my Bastiat, I am always reminded how humans tend to insist on adopting the same myths and fallacies about the economy. The myths he busts in the 19th century can be seen on the pages of our newspapers every day of the 21st century. But one unique idea we have spawned since Bastiat is this bizarre notion that somehow it is wrong to pay for ones own medical expenses out of pocket. It took forever to convince even my very smart HBS-educated wife that it was a much better deal to go to a high-deductible health plan. Since we did so, we have saved a ton of money, and by the way done our small bit to keep prices down for the rest of you by actually shopping for things like x-rays (you can thank me later). I don't know why this fallacy is so entrenched and hard to change, but we have built the entire edifice of Obamacare on top of it.

Having sold off its manufacturing plant, fired nearly 1,000 workers and proven the non-viability of its business model, Solyndra's only real assets are what the IRS calls "tax attributes." These are between $875 million and $975 million in net operating losses that can reduce future taxable income, which the IRS values as high as $350 million. Before it went toes up, Solyndra also accumulated $12 million in solar tax credits that can reduce tax liabilities dollar for dollar.

Tax-loss carry-forwards are routine but worthless if a company can't turn profits to pay taxes on. So Solyndra's owners are asking the court to liquidate the rest of the business and contribute a net $6.7 million to pay off creditors for pennies on the dollar. A holding corporation will then emerge from Chapter 11 that won't make products or employ workers, but it will get the Solyndra tax offsets.

The dummy company is owned by Argonaut Ventures I LLC, Solyndra's largest shareholder and the primary investment arm of the George Kaiser Family Foundation. Mr. Kaiser is a Tulsa oil billionaire who bundled campaign checks for Mr. Obama in 2008.

Wow, who could have predicted this? Well, lots of folks, including me just over a year ago. I actually underestimated the value, assuming the losses would be worth about $150 million in avoided taxes, not the $350 million the IRS now pegs them at. If I can figure out this game, the Obama Administration had to know what was going on.

If the Administration allows this to happen (and remember that in the GM boondoggle, Obama waived the traditional rules that have bankrupt companies losing their tax loss carryforwards, giving GM a multi-billion dollar tax subsidy almost no one counts in the bailout costs), this will make Kaiser's last cash investment in Solyndra one of the great crony deals of all time.

If you remember, Kaiser (via Argonaut) invested $75 million as Solyndra was going down the tubes. No rational person could have thought that amount would have saved the company, and it didn't. What it bought, we now know, is three things:

Kaiser got the US Government to give up their lead creditor position to Kaiser, basically putting the US Government behind the Obama donor to get repaid and reducing the taxpayers' influence in the bankruptcy

It gave Kaiser a few precious months to loot the company. Between that $75 million investment and the bankruptcy, Solyndra sold off most of its liquid assets at a discount to .... Argonaut, the group controlled by Kaiser

It looks like Kaiser will get nearly a billion dollars in tax losses that can be used to reduce its future taxes by $350 million.

It is becoming increasingly clear that it is impossible to calculate exactly what you owe to the IRS (even the IRS will not take responsibility for what their customer support people tell you that you owe). Given that, one can't really know his or her tax burden for sure until and unless one is audited and the case is adjudicated. Doesn't this put the tax code in violation of the Constitution's prohibition of ex post facto law?

Sure seems like it. Here is the list of questions the Ohio Tea Party has asked as part of their application, which should be routine, for 501(c)4 status. The Virginia Tea Party had similar requests, including apparently a demand for donor lists and confidential materials which the IRS says will be made public. The latter seems part and parcel of recent initiative on the Left (seen also in the whole Heartland fiasco) to out confidential donors of Conservative and libertarian organizations while demanding no similar transparency of organizations on the Left.

By the way, I am President of a 501(c)4 organization (basically a trade group) and I can say with some authority that we never have received any sort of parallel set of questions from the IRS vis a vis our status, so this is either a very new requirement or one especially crafted to apply only to the Tea Party. I can say from all too much experience that having a Federal agency sit on a request for 9 months and then suddenly demand incredible amounts of work in just a few days from the private party is absolutely typical.